Huawei seeks unique role in China's mobile phone industry

Chinese mobile giant Huawei became the largest Chinese smartphone provider by selling 20 million smartphones globally in 2011. But it has a more aggressive ambition--to climb to the list of world's top three smartphone providers, making its mobile phone product line as successful as its base line.

Chinese mobile giant Huawei became the largest Chinese smartphone provider by selling 20 million smartphones globally in 2011. But it has a more aggressive ambition--to climb to the list of world's top three smartphone providers, making its mobile phone product line as successful as its base line.

To achieve this goal, Huawei has been dedicated to accelerating the development of new mobile products. In Mobile World Congress 2012 held in Barcelona, Huawei showcased a series of new products, including MediaPad 10 FHD tablet, and Ascend D quad smartphone. However, apart from these products, Huawei was more eager to show off its other major achievement--K3V2 quad-core processor independently designed by itself.

K3V2 can be clocked at either 1.2 or 1.5GHz. The company said the chip delivers 30 to 50 percent more performance than the Tegra3 across a range of benchmarks. Huawei has billed it as the fastest quad-core processor in the world.

For a long time, the ability to develop a processor of one's own has been a key indicator for the core competence of a hardware company in the industry. China providers once developed ark, Godson and other made-in-China CPUs; however, the performance was not very competitive.

But for a mobile phone provider, Huawei's attempt was unprecedented in China. Chinese

manufacturers generally prefer to take advantage of the ripe solutions provided by other chip companies.

MediaTak's lowcost Turnkey solution, for instance, has been the main technical support for many copy-cat mobile phone manufacturers. The high investment and high risk in the semiconductor industry has deterred any mobile phone producer from a rash entry.

But Huawei has been underlining its strength in R&D, distancing itself from any traditional mobile phone manufacturers in China. Secretary General of China Cellphone Union Lao Yao, who have been closely following the development of semiconductors, said as far as the global mobile terminal industry is concerned, it is a trend for a cellphone provider to develop its own chips. Apple and Sumsung have already been doing it, and Huawei is trying to catch up in its endeavor to become the world's top-rated mobile product manufacturer designing chips by itself.

"Huawei started its cellphone design from the chip. The development of the most basic technique could provide a firm support for the variation of its mobile phones; in other words, Huawei is going to start from the bottom technique . “said Lao Yao.

Huawei has been in semiconductor industry for many years. Indeed, the quad-core K3V2 processor was developed by "Haisi Semiconductors", one of Huawei's affiliates. Haisi Semiconductors Co. Ltd was established in 2004, formerly the Huawei’s “heart” department – Huawei IC design center founded in 1991. Huawei Haisi products cover wireless networks, fixed networks, digital media, and other areas of chips and solutions.

Just about two years ago, Huawei Haisi launched a 600MHZ chip--Hisilicon K3, though it failed to win much recognition in the market due to wrong positioning or flaws. The recent return to the chip field shows Huawei's firm resolve to compete in the chip market.

But even though Huawei's technical strength has won wide recognition among other Chinese mobile phone manufacturers, it has a weak brand. The company formerly sold products directly to operators, with little direct contact with its users. It needs a new brand image now to present itself to enterprise and individual users.

IT analyst and Huawei-savvy Ji Yongqing said the majority of Huawei's marketing personnel come from the departments of the operators and thus lack experience in brand marketing. He said Huawei needs more brand promotion campaigns especially in Chinese and Indian markets, where operators have a weak grip on consumers.

Huawei's earlier sponsoring in Italy's Super Cup, as Ji saw it, yielded little fruit in promoting the brand. "Huawei needs to introduce some talents in marketing from outside the company, to launch brand marketing with new ideas." said Ji Yongqing.

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